What is Sales and Trading?
January 27, 2025
What is Sales and Trading?
Sales and trading within financial institutions involves the buying and selling financial instruments. The trading floor is typically organized around equities (both cash equities and derivatives) and FICC (fixed income, commodities, and currencies). Within fixed income, there are distinctions between government bonds (risk-free securities called rates) and corporate bonds (called credit and high yield). Derivatives include swaps, futures, and options.
Some banks or firms will specialize in a particular area of sales and trading (such as UK equities or global commodities) whereas others will offer multiple services for their clients. This is typically driven by what licenses they choose to operate with and how profitable each area is.
Key Learning Points
- Sales and trading involve the buying and selling of financial instruments within the capital markets
- The trading floor is typically organized around equities and FICC (fixed income, commodities, and currencies)
- The main roles include Sales, Trading, Research and Structuring
- Sales roles require strong communication skills, while trading roles need great math skills, quick decision-making abilities, and technical skills
- Starting a career in sales and trading is challenging but rewarding, with high-income potential
- Most positions require a bachelor’s degree in finance or economics, and success requires confidence, drive, and persistence
What are the Main Roles Within Sales and Trading Desks?
The main roles within sales and trading desks include Sales, Trading, Research, and Structuring.
- Salespeople manage client relationships and understand their needs to offer suitable products and services
- Traders execute orders from clients, balancing risk and achieving the best prices
- Research analysts produce macroeconomic, sector or company-specific research to generate trade ideas or investment recommendations
- Structuring teams collaborate with sales and trading colleagues to create custom solutions for clients with complex needs
Sales and trading roles can be organized either by product or by client. When organized by product, teams are responsible for selling one product or product type such as US large cap equities to the banks’ clients.
When organized by client, teams manage the relationship between the bank and a specific list of clients (such as institutional investors and pension funds) for all products they wish to trade. Often individuals on the team will be given a specific list of clients to contact and build relationships with.
What’s the Difference Between Sales Jobs, Trading Jobs, and Sales Trading Jobs?
It can feel like a lot of these roles have similar titles and expectations, but it’s worthwhile looking at the difference in each job title to help decide which department or employer might be the best fit for you.
In simple terms, sales jobs involve client-facing roles and usually the entire team will be client-facing, including new recruits once settled. Salespeople manage relationships with clients and understand their needs to offer suitable products and services. Often a junior salesperson will get a list of smaller clients to start contacting and building relationships with. This list will grow with experience, and hopefully, the clients will also assume more senior roles as well which mutually benefits the relationship.
Trading jobs involve executing orders from clients in relevant markets, managing risks, and ensuring trades are executed at the best price. The orders are usually received from the sales team and passed onto the trading team to execute the instructions. The trader will keep the sales team informed about market trends and any trading patterns or behavior that they spot in the marketplace.
Sales-trading jobs typically combine elements of both sales and trading. Usually, sales traders will have a client relationship with another sales trader (from the client company) and will take and execute orders on their behalf.
What Do Salespeople and Traders Do?
Salespeople have direct relationships with clients, understanding their needs and offering appropriate products and services. They can be responsible for selling specific products or managing client relationships across multiple products.
Traders receive and execute orders from clients, making quick decisions to balance risk and achieve the best prices. They often work with a high degree of automation and may collaborate with quant analysts to maintain electronic trading systems.
What’s the Difference Between Trading Equities, Fixed Income Products, and Derivatives?
When looking at sales and trading positions it’s important to consider which financial products the role will include. Each are distinct and require certain expertise and knowledge to help develop a career.
Trading equities involves dealing with cash equities and straight shares – this is often company or sector-specific so will require knowledge about each individual company or market. Fixed income products include government bonds (rates) and corporate bonds (credit and high yield) and will focus on market conditions and government policies. Derivatives encompass swaps, futures, and options, and are typically organized into either equity or fixed-income groupings. These products require a strong mathematical understanding of the product as well as market conditions. The divisions within these categories can change as markets evolve and new products are introduced.
What is Electronic Trading?
Electronic trading involves the use of automated systems to execute trades. This has led to a high degree of automation within trading roles, with quant analysts often employed to design and maintain electronic trading flow systems. This automation is changing sales and trading jobs by increasing efficiency and the speed of trade execution.
What Skills Do You Need for A Career in Sales and Trading?
Sales roles require very strong communication skills to manage client relationships effectively. Often this includes emails and short daily correspondences as well as in-person meetings.
Trading roles require robust math skills, quick decision-making abilities, and technical skills that depend on the specific desk. For example, math is crucial for fixed income trading, while skills in corporate valuation are important for equities.
Some further skills that sales or trading professionals can benefit from developing include:
- Financial analysis: sales and trading professionals need to collect, evaluate, and interpret financial data. This data is used to make investment or trading decisions that minimize risks and optimize profits while considering current market factors or trends.
- Product expertise: it is important for sales and trading professionals to have a thorough understanding of the product class and all its related concepts in order to make quick and accurate decisions.
- Decision-making: the sales and trading environment requires professionals to make high-value decisions very quickly. They must efficiently analyze financial information to make effective decisions, such as executing trades or minimizing financial risks.
- Relationship management: success in trading or sales management involves the ability to communicate with clients, understand their needs, and present them with products they are likely to find suitable. Additionally, professionals must be persuasive and ensure clients feel comfortable with their recommendations.
- Risk management: managing risk is crucial, as errors can significantly impact gains. There are strict standards regarding what can be done, and professionals must learn to manage risks to maximize revenue.
How To Get into The Sales and Trading Industry
Starting a sales and trading career is challenging but rewarding, with high-income potential. Most positions need a bachelor’s degree in finance or economics. Success requires confidence, drive, and persistence in a competitive market. Often the best place to start is seeking an internship in a financial institution or contacting those working in these roles to ask for career advice.
What Qualifications Do You Need for a Career in Sales and Trading?
Education and training
Sales and trading professionals don’t require a specific professional education or training. Today, many have a bachelor’s degree in finance-related fields like mathematics, economics, or accounting. Numerical literacy and math are still key skills in this area and in some roles, it can be advantageous to be fluent in another language.
Is an MBA required to work in sales and trading (S&T)?
Those in sales often pursue an MBA or advanced degree in a related discipline, but it is not essential. Building a strong knowledge of markets and investment principles can be an excellent way to start learning about a career in this area. Potential interviewers will expect candidates to be aware of market conditions and key investment drivers and valuation techniques.
Learn the markets and products for both equities and fixed income, currencies and commodities, and the relevant derivatives with the Financial Edge sales and trading course.
Licenses
Traders and certain sales representatives need licenses, which differ by firm and specialization. These can be provided in-house as part of the role (such as a license to trade in a certain market) or can be compliance and regulatory licenses that can be gained when starting a role (individual certificates to show mandatory compliance and regulations have been met).
Experience
Trading and financial firms usually seek experienced sales and trading professionals where available. If you’re new, try to get internships in the sales and trading industry before applying for a full-time job. Internships provide hands-on experience and show potential employers you have the needed skills and knowledge.
These types of roles can be niche in terms of the specific requirements of the market or product where the team operates so often traders specialize in a particular product such as bonds or derivatives. Any experience in the sales and trading area will boost a CV.
Salaries and Bonuses in Sales and Trading Jobs
Salaries and bonuses in sales and trading jobs can be quite lucrative. The compensation structure typically includes a base salary plus a performance-based bonus. The bonus can often be a significant portion of the total compensation, especially for high-performing individuals. The exact figures can vary widely depending on the firm, location, and the individual’s experience and performance.
Sales & Trading Exit Opportunity
Sales and trading professionals have various exit opportunities to shift careers. Many move into roles such as portfolio management, hedge funds, private equity, or venture capital. Others may transition into corporate finance roles or start their own businesses.
The skills and experience gained in sales and trading, such as risk management, client relationship management, and market analysis, are highly transferable and valued in many other finance-related fields. Some salespeople move into investor relations which requires similar client facing skills and strong financial literacy.
Conclusion
Sales and trading involve the buying and selling of financial instruments within the capital markets, requiring a diverse set of skills including strong communication, quick decision-making, and technical expertise. Starting a career in this field is challenging but rewarding, with high-income potential and opportunities for growth and development.
Download typical questions that may be asked by interviewers to candidates seeking a sales and trading position.
Additional Resources
How to Get a Job in Sales and Trading